Section I - Multiple Choice (3 Viewers)

[gurmies]

19/20...fucking last question.

 

[JAM91]

I also got C for 15. Isnt that what contributed to our major current account deficit right now rudd borrowing to finance his fiscal stimulus?

hope you didnt put that in your CAD essay cos thats completely wrong. CAD is only private sector debt.

 

[gurmies]

La Bomba, the budget is being financed via the domestic private sector, because there's no risk of "crowding" people "out" during a recession like we're in now. But yes, had he borrowed from overseas, our CAD would widen.

 

[alex1992]

The correct answer to Q17 is D.

If foreigners are demanding our exports, they are paying Australian firms with $A, thus increasing the supply of $A domestically.

 

[ajay12]

The correct answer to Q17 is D.

If foreigners are demanding our exports, they are paying Australian firms with $A, thus increasing the supply of $A domestically.

Yeah I got that as well.

 

[JAM91]

The correct answer to Q17 is D.

If foreigners are demanding our exports, they are paying Australian firms with $A, thus increasing the supply of $A domestically.

ummmmm no if they want our exports that increases demand for the $A which appreciates it, increased demand for our imports would move the demand curve to the right whereas the picture shows the supply curve moving the right meaning the supply of the $A has increased

A is correct because to increase the supply of the $A would involve us increasing our imports which increases supply and thus depreciates the $A

 

[bell531]

Someone please scan the paper and upload it.

And ajay i'd already looked the 2006 question up but i had no idea what our question was so I needed someone with the test to adjudicate

 

[daniel81]

The correct answer to Q17 is D.

If foreigners are demanding our exports, they are paying Australian firms with $A, thus increasing the supply of $A domestically.

The answer is A, because if Australians demand foreign assets, they have to sell the $A to purchase the foreign currency with which to buy the assets, thus increasing supply of $A.

And la bomba, Q12 is C. I posted the notes from class I took down that showed that. Are you saying that you're able to do that question better than my teacher, who's been teaching the subject for 15 years and has been university educated in the field?

And in case you missed it: http://img525.imageshack.us/img525/6398/imggc.jpg

 

[bell531]

yes bro but as 130 is the base year bro, u divide 6000 by 130 then times by 100.

Wait, if 130 is the base year '100' should never come into calculations.

 

[gurmies]

Isn't the formula for Real GDP: Nominal GDP x 100/CPI...don't think it's base CPI, but I could be wrong here.

 

[RaMaNa]

Isn't the formula for Real GDP: Nominal GDP x 100/CPI...don't think it's base CPI, but I could be wrong here.

thats what i thought but apparently it isnt :S

 

[munchiecrunchie]

For all of you that are wondering what question 12 was:

Year/Nominal GDP/CPI/HDI

1/6000/130/0.61

2/6800/150/0.76

According to the data, which statement is correct for this economy?
a) Real GDP has increased and the quality of life has improved
b) Real GDP has increased and the quality of life has declined
c) Real GDP has decreased and the quality of life has improved
d) Real GDP has decreased and the quality of lie has declined

This is how i worked it out, and what i believe to be right.

The Real GDP Formula is:

CPI previous year
--------------------- x GDP
CPI current year

Therefore:
130
----- x 6000 = 5200
150

This means that REAL GDP has decreased from 6000 to 5200, therefore the answer is C

Anyone disagree with this? Im interested to know because since people are saying its A it will haunt me.

the formula for real GDP is in fact:

CPI base year
--------------------- x GDP
CPI current year

it doesn't matter whether you use 100 or 130 as your base year for this question, so long as you are consistent with it.

either way, you should find that real GDP has declined in the following fashion (using 100 as the base):

real GDP for year 1 = 6000/130 x 100 = 4615

real GDP for year 2 = 6800/150 x 100 = 4533

therefore real GDP has declined, and hence I believe the answer to be C.

 

[La Bomba]

the base year for this is 130. year 1 is 130. there is no 100!!!! if year 1 was 100 then yes, but the base year isnt. usualy year 1 is 100. thats wat has tricked you. so how is real GDP going to decline, especialy when hdi has risen so significantly . 100 is not the base. go ask your economics teacher please i am sik of explaining.

 

[La Bomba]

a person who is expected to top the state, as he has been averaging over 94% in each economics test, agrees with me. and our school was ranked 164 in 2007. and also the economics papers are marked very hard at our school. he said yes the answer is a, and explained why, which is $6800x 130/150. then for year 1 6000 divided by 130 x100.

 

[munchiecrunchie]

the base year for this is 130. year 1 is 130. there is no 100!!!! if year 1 was 100 then yes, but the base year isnt. usualy year 1 is 100. thats wat has tricked you. so how is real GDP going to decline, especialy when hdi has risen so significantly . 100 is not the base. go ask your economics teacher please i am sik of explaining.

using 130 as the base year,

real GDP for year 1 = 6000/130 x 130 = 6000

real GDP for year 2 = 6800/150 x 130 = 5893

which is still a decline in real GDP. and hence its C.


ps I'm studying Economics at uni. if you use the calculations you've used to get answer A, you're essentially no longer comparing prices to your base year - base year stays the same.

 

[La Bomba]

please close the case. the answer is A. i have explained enough.

 

[RaMaNa]

using 130 as the base year,

real GDP for year 1 = 6000/130 x 130 = 6000

real GDP for year 2 = 6800/150 x 130 = 5893

which is still a decline in real GDP. and hence its C.


ps I'm studying Economics at uni. if you use the calculations you've used to get answer A, you're essentially no longer comparing prices to your base year - base year stays the same.

that actually looks right LOL

 

[anthonysak]

eh dudes
what did u guys put for the first inflation question in short answer
i got food
which was what evryone at my school got

i go to baulko btw

 

[cu46_Keith]

munchiecrunchie why are you on a forum for HSC students if you are at uni, no offense I just had to ask, ps law/eco seems like a cool degree, anyway buddy as I mentioned earlier it isn't logical that real GDP would fall and living standards would go up as it suggests inflation is too high and that the economy is producing less goods and services reducing real incomes and hence the revenue need for the government investement infastructure, education etc, so must be a and not c

 

[munchiecrunchie]

munchiecrunchie why are you on a forum for HSC students if you are at uni, no offense I just had to ask, ps law/eco seems like a cool degree, anyway buddy as I mentioned earlier it isn't logical that real GDP would fall and living standards would go up as it suggests inflation is too high and that the economy is producing less goods and services reducing real incomes and hence the revenue need for the government investement infastructure, education etc, so must be a and not c

haha i'm an economics tutor, and i've got alot of students from BoS. which is why i'm still here on occasion =)

its a hypothetical economy, so anything is possible.